BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Emilio borrows $1200 from a bank with 8% simple interest per year. How much will he have to pay back total in 2 years?
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$150
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$192
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$1350
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$1392
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Explanation:
Detailed explanation-1: -r = annual rate of interest (as a decimal) t = number of years the amount is deposited or borrowed for. A = amount of money accumulated after n years, including interest.
Detailed explanation-2: -Interest formula for simple interest: I = Prt where I is the total amount of interest accrued; over t time periods at a simple interest rate, r, and where the original amount invested or borrowed is P.
Detailed explanation-3: -I = Prt. where I is the amount of interest, P is the principal (amount of money borrowed), r is the interest rate (per year), and t is the time (expressed in years). The formula can also be expressed as: A = P + I = P(1 + rt)
There is 1 question to complete.